Finance
The secondary mortgage market primarily serves what function?
AIt makes retail loans directly to homebuyers
BIt purchases mortgages from primary lenders, freeing up capital for new loans✓ Correct
CIt sets the interest rates for all mortgages nationwide
DIt insures mortgages against default risk
Explanation
The secondary mortgage market (including Fannie Mae, Freddie Mac, and Ginnie Mae) purchases mortgages from primary lenders. This replenishes lenders' capital so they can make new loans, while the secondary market pools and sells the mortgages as mortgage-backed securities to investors.
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